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TPP: the next trade frontier




Alejandro Luna of Olivares discusses the implications of Mexico joining the Trans-Pacific Partnership, such as major reforms in the life-sciences sector

The Trans-Pacific Partnership (TPP) represents the next trade frontier and an opportunity for Mexico to review and improve its IP system, including some of the main issues in life sciences.

The Mexican IP Law was enacted in 1991 and was substantially modified in 1994. Since then, there have been few amendments and reforms to the IP laws and its regulations, which have barely managed to make an impact on the IP system in Mexico.

The statutory IP Law enacted in 1991 and its 1994 modifications derived directly from the negotiations of the North American Free Agreement with the US and Canada (Nafta) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs).


"There is a general consensus among the partners that the standard of protection for intellectual property should go beyond TRIPs"


After 1991, the few changes implemented in the IP framework include: the Mexican Institute of Intellectual Property is created (1993); amendments to the IP law (preliminary injunctions introduced in the system in 1994); Nafta enters into force (1994); TRIPs enters into force (1995); reforms to the Copyright Law (1997 and 1999); amendments to the Federal Law for Administrative Proceedings provide original jurisdiction to the Federal Court for Tax and Administrative Affairs (FCTA) to review decisions issued by the Mexican Patent Office – IMPI (2001); the Decree on the Promulgation of the WIPO Performances and Phonograms Treaty is published (2002); the FCTA creates SEPI – the IP Specialised Bench (2009); discussions for adopting ACTA – the Anti-Counterfeiting Trade Agreement (2010 and 2011); online proceedings before SEPI (2011); gratuitous application of justice in the copyright arena (2012); the Madrid Protocol Agreement enters into force (2013); discussions to adopt the Trans-Pacific Partnership (2013).

In November 2011 during the Asia-Pacific Economic Cooperation (Apec) meeting, Mexico demonstrated its interest to initiate a consultation to participate in the TPP. On June 18 2012, during the G20 in Los Cabos, México, the countries participating in the TPP decided to invite Mexico to participate.

The TPP countries were originally Brunei, Chile, New Zealand and Singapore. Since 2009, the US, Australia, Vietnam, Malaysia and Peru have become negotiating participants. Mexico, Canada and lately Japan are also willing to join.

These twelve partners of the TPP will represent more than the 30% of the world GDP, 19% of global exports, 22% of global importats and a market of 198 million potential consumers (not including the US population).

Regarding intellectual property, the partners of the TPP remain confident that copyrights, patents and trade marks will be enforced. It appears that there is a general consensus among the partners that the standard of protection for intellectual property should go beyond TRIPs.

The terms, conditions and wording of the TPP remain confidential; however, it has been made public that the main IP issues are: non-traditional trade marks; the Madrid Protocol and international trade mark applications; the appellation of origin and geographic indications; efficient and prompt civil and criminal enforcement; effective Customs measures; agrochemical patents; copyrights and the digital era; pharmaceutical patents; and, data package exclusivity.

Regarding life sciences and pharmaceutical patents, there is no doubt that the main issues for the TPP which need to be reviewed in the Mexican domestic law are: data package exclusivity; the patent restoration terms; and, the patent linkage including its Roche-Bolar exception.

Data package exclusivity

The Mexican domestic law is silent on data package exclusivity (DPE). Based on TRIPs and Nafta and the hierarchy of the international treaties in our legal system, our law firm fashioned a legal strategy to obtain DPE recognition for products that deserve the protection. We obtained court decisions, and requested the agency in charge of granting marketing authorisations (Cofepris) to observe and recognise DPE for the products of interest.

The execution by Mexico of the TPP will trigger the proper and specific regulation in Mexico for DPE.

Patent term extensions

Although the possibility is open in Nafta, there is nothing in the domestic law that establishes the possibility of patent restoration terms.

Mexican Linkage Regulation

In 2003, the linkage regulation was enacted in Article 147 bis of the Mexican Industrial Property Regulations and Article 167 bis of the Health Regulation.


"Patent holders have been forced to use several different methods to attack the violations of their IP rights"


Under the cited provisions, IMPI is bound to publish a specific gazette every six months, listing the patents in force that cover allopathic medicines.

Cofepris is bound to observe the patents which are listed in the linkage gazette according to the generic name of the active ingredient, before granting marketing authorisations to third parties different to the titleholder, and alternatively request additional information of the applicant.

The Mexican Linkage Regulation only excludes from the Gazette those patents that cover processes of manufacture and formulation of drugs.

Since the date in which the linkage was in force, under a wrong and limited interpretation, IMPI has only published patents covering active ingredients per se.

Our firm fashioned a litigation strategy and also handled the majority of the cases, contesting this wrong interpretation through constitutional actions to obtain the publication of patents covering formulations and second uses. The Mexican Supreme Court agreed with this broadened interpretation.

However, this optimism turned to skepticism when some pharmaceutical companies and brokers began requesting and obtaining importation permits granted by Cofepris for huge amounts of patented active ingredients in bulk.

In the majority of the cases, the importation permits requested by pharmaceutical companies and brokers and authorised by Cofepris consisted in vast amounts of patented compounds when the life term of the patent was close to expiration. This trend has increased during the last five years as Mexico has eradicated the so-called plant requirement, which established that in order to have a marketing authorisation to commercialise a medicament, an approved facility in Mexico was required in which to manufacture it.

Importation permit regulations

Under the Mexican Health Law and its Regulations, an importer of raw materials for pharmaceutical products requires an import permit, granted by the Ministry of Health, through Cofepris.

Provisions regarding imports of active pharmaceutical ingredients (APIs) do not make any reference to linkage provisions to prevent a violation of patent rights by granting the importation permits. The applicant for an import permit does not have to declare whether the imported product is patented or not, or to prove the existence of a licence or authorisation by the patent holder. The situation is ever more critical when there is no obligation on the importer to mention or to declare the destination of the products.

The linkage system does contain a Bolar-type exemption. This allows generic companies to apply for marketing authorisations and to use the patented materials to conduct the required regulatory requirements three years prior to the expiration date of the patent. The problem arises when the law and regulation for import permits of raw material are silent on IP-related controls or provides a reference to the linkage gazette. Even worse, there are no guidelines or standards to bind Cofepris to review and take into consideration the amount of raw materials that would be authorised to be imported. In this regard, the main concern is that recently there has been an increase of import permits for patented compounds in bulk that clearly exceeds the justified amounts for clinical trials or experimental use.

As a consequence, patent holders have been forced to use several different methods to attack the violations of their IP rights, including patent infringement actions (where coordination between the patent and Customs offices is not always ideal), and challenges against import permits issued by Cofepris.

Measures at Customs

Customs' efforts are devoted to avoiding the entrance of trade mark counterfeiting products, but there is nothing similar to avoid the violation of patents. For medicines, pharmaceutical substances, chemicals and APIs, the activity and efforts of the Customs Office is focused and limited to detecting prohibited drugs and narcotics.

Since June 2012, Mexican Customs is collaborating in detecting and seizing active ingredients grounded in border measures served by IMPI. Thanks to the cooperation of the Customs Office and IMPI, one year ago, our firm obtained the first seizure ever of an infringing active ingredient in bulk at the border and prior to its entry into the Mexican market.

Experimental use and the Roche-Bolar defence

During the enforcement of patents, particularly in relation to the importation permits of APIs, the common defence used by defendants is that they are covered under the umbrella of experimental use and the Roche-Bolar exception.


"Mexico has a valuable opportunity to review and change its entire IP system"


However, in the majority of cases, infringers have invoked these two defences simultaneously and in a vague and undefined manner. They have overlooked the fact that these two defences are independent of eachother, as each has particular methods and specific standards.

In addition, there are no criteria or precedents to rely on regarding the quantity of patented APIs or other similar patented products that their importation or use would reasonably constitute experimental use or the Roche-Bolar exception.

Therefore, IMPI should address the particulars of every case, being careful in the analysis of the argumentation and evidence submitted by the parties, as such defences cannot be automatically applied. In addition, IMPI and the parties should base their evidence on the regulatory framework for the product of interest; the only way to know if the amount of the imported products is justified for experimental use or if the Roche-Bolar exception applies, is by knowing how much of the product is required to conduct an academic or improving experimentation or to prove interchangeability, safety and efficacy.

There are some relatively easy measures that can be taken by the corresponding authorities to prevent the entrance of infringing pharmaceutical substances into the country.

Cofepris can adopt the use and observance of the patent linkage gazette (which identifies the chemical name, generic name and the main claims of a patented medicine), also for approving import permits.

Depending the nature of the substance, Cofepris should establish standards for the amount of APIs required to comply with the regulatory tests for marketing approvals. Cofepris may also require the importers to declare the destination of the imported products.

IMPI should clearly establish through case law, the differences between the sole experimental use and the Roche-Bolar exception. It should also be careful and strict in the interpretation and application of the experimental use and Roche-Bolar exception on a case by case basis.

Customs can take advantage of the information contained in the patent linkage gazette to detect and stop substances entering the country in violation of valid patents.

Spurring on change and innovation

Due to the negotiations and integration of Mexico to the TPP, Mexico has a valuable opportunity to review and change its entire IP system and to adopt more efficient standards of IP protection.

The implications of the TPP go beyond the Mexican IP system and its impact in the life-sciences industry. It will spur on the creation of jobs, higher living standards and the reduction of poverty, as well as an innovative and creative economy, with an improved IP system.

Alejandro Luna

 

Alejandro Luna joined Olivares in 1996 and became a partner in 2005. He is the head of the litigation and regulatory practice group and co-chair of the life sciences and pharmaceutical law and industry group. Alejandro has been instrumental in the development of Mexico's IP legal system as an attorney, a professor, and a lobbyist. He has been selected as the delegate to represent AMIFF, the industry association for R&D pharmaceutical companies who do business in Mexico, in the Trans-Pacific Partnership negotiations.

Alejandro's practice is not solely devoted to life sciences; he represents clients across a myriad of industries. He has successfully litigated several term corrections to obtain additional terms of patent exclusivity for pharmaceutical compound patents and pioneered administrative court actions to seek recognition of DPE rights, which are not specifically contemplated by Mexican law.

Alejandro graduated from the Universidad Latinoamericana in 1996, holds four diplomas from the Universidad Panamerican and an LLM in IP law from the Franklin Pierce Law Center.

Alejandro is the author of several articles on patents, litigation and regulatory issues. He is a part-time professor at the Universidad Nacional Autonoma de México (UNAM), and is a member of the Asociación Mexicana para la Protección de la Propiedad Intelectual (AMPPI), the International Association of the Protection of Intellectual Property (AIPPI), and the Biotechnology Industry Organisation (BIO) among others.



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